WASHINGTON — There are several misconceptions about America’s meat industry, according to the North American Meat Institute.
The organization shared facts to clarify common misunderstandings about the complex, competitive beef market in the United States.
“Despite the pandemic’s challenges the market is competitive and growing,” said Sarah Little, vice president of communications at the Meat Institute. “Since October 2020, there have been several announcements of investments to build new packing facilities or expand capacity at existing plants that would increase cattle slaughter capacity by about 4%, including new independent, local and regional packers.”
Labor challenges in the meat industry have been exacerbated by COVID-19, Little said.
“Those calling for government intervention in the market never address labor,” she said. “Labor is, and is likely to remain, a significant factor that affects utilization of production and is also a factor that will challenge new small and medium-sized facilities entering the market.”
Common Beef Market Myths
Myth: There is no growth in the packing industry.
Fact: Despite the pandemic’s challenges the market is competitive and growing. Since last year there have been several announcements about building new packing facilities or expanding capacity at existing plants that would increase cattle slaughter capacity by more than 4%.
Myth: Cattle prices are not being driven by the market.
Fact: Cattle prices are where they are because they follow supply and demand.
Myth: Packers are able to control prices and defy expectations of market fundamentals.
Fact: The cattle market works just as economists would have predicted given the current conditions: when supplies of cattle increase, prices decrease — and vice versa.
Myth: Large price disparities are leading independent cattle producers to go broke.
Fact: The market suffered through COVID, and the effects are lingering, but Congress provided producers a safety net through the Coronavirus Food Assistance Program to get through the impact of a once-in-a-century event.
For more information on the Meat Institute, visit www.meatinstitute.org.